This website uses cookies to improve user experience. By using our website you consent to all cookies in accordance with our Cookie Policy. Read more

RBS ex-chief Goodwin might have to give back £16million pension pot

26 February 2009 / by Rachael Stiles
Alistair Darling has said that he did not know that the £650,000 annual pension RBS agreed to pay Sir Fred Goodwin was not contractual and might force the ex bank chief to give some of it back.

The Chancellor, having admitted that he could have prevented Sir Fred Goodwin from getting such a mammoth pension if he had been better informed, said that he was under the impression that it was "an unavoidable legal commitment," the BBC has reported.

Shadow Chancellor George Osborne said that Darling's "excuse" was "pathetic." The Chancellor's lack of awareness over the issue of pensions is demonstrative of how the Government "did not have a grip on events," he told the BBC.

Now that the taxpayer has a majority stake in Royal Bank of Scotland (RBS) -since the Government bailed it out - critics are accusing the Chancellor of using taxpayers' money irresponsibly.

Amid ongoing anger at the culture of bankers being rewarded for failure, something which the Prime Minister said is must come to an end, Mr Darling has appealed to Sir Fred to give back his £650,000 pension, which he is getting for taking early retirement at age 50.

The ex-chief of RBS is thought to have been responsible for the business model which caused the bank's failure and eventual part-nationalisation, such as his decision to buy Dutch bank ABN Amro, which is widely thought to have made RBS more vulnerable to the credit crunch.

He now has access to a £16million pension pot which he can claim from for the rest of his life.

Such excesses cannot be justified, and ministers are considering legal action to claw back the money if Sir Fred does not agree to give it back willingly, the Chancellor said.

Talking to BBC Radio 4's Today programme, he said: "We've got the lawyers looking at this, but I do think that on a voluntary basis, actually, Sir Fred could resolve this problem and he could do it quite quickly."

© Fair Investment Company Ltd